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FALL PARADE
From the October 2004 Issue of CardTrak®

Traditionally credit card issuers unveil new payments cards in September and October to hopefully capture some additional holiday spending. This year, twelve interesting card products have appeared, all with innovative angles or structures.

Here is the quick rundown on the major hook for each new card:

1. Citibank PremierPass MasterCard - earns points for flying on any airline plus points for card spending

2. American Express/Costco TrueEarnings Card - earns different levels of cashback depending on the type of purchase

3. Gap Card - multi-store card that earns combined rewards for spending in three different stores

4. American Express IN:NYC Card - card offering special rewards and perks for New Yorkers

5. Charles Schwab/MBNA VISA - can redeem points for equity trades plus free air travel

6. Bank One THE ONE VISA - a debit card for high school students

7. Chase/Circuit City Rewards VISA - relaunched general purpose card with beefed-up rewards

8. Mens Wearhouse Perfect Fit Card - relaunched store card offering automatic discounts plus rewards

9. Wells Fargo/Pella VISA - a dual credit line card with one statement

10. U.S. Bank ATA VISA - a sponsored airline card with very low redemption levels

11. RBS/Kroger 1-2-3 Rewards MasterCard - relaunched U.S. co-branded grocery card with a British issuer

12. MBNA/Starwood Preferred Guest MasterCard - a Canadian card launched by a top U.S. issuer and hotel chain

1. CITI PREMIERPASS MASTERCARD

Citibank has launched two new rewards credit cards offering points for miles flown on any airline as well as points for all purchases. The new "Citi PremierPass MasterCard" also enables cardholders to earn points for the purchase, plus the miles flown, on tickets purchased for family or friends. Since the new card is not sponsored by an airline, cardholders can continue to earn separate frequent flyer miles from their airline carrier if they are enrolled in its frequent flyer program. Cardholders of the "PremierPass MasterCard" can earn up to 100,000 total points per calendar year, only 50,000 of which may be flight points. Cardholders of the "Elite PremierPass MasterCard" can earn up to 200,000 total points per calendar year, only 100,000 of which may be flight points. The "Elite" card carries a $75 annual fee, while the standard card is free. There are also sign-up bonus points: 5,000 for the standard card and 15,000 for the "Elite" card. Points do not expire if the card is used at least once in three years. Points earned on either "PremierPass MasterCard" can be used to purchase round-trip airline tickets on any airline worldwide, with no black-out dates, starting at 25,000 points. Unlike many generic air mile credit card programs, Citi does not cap the ticket value. Cardholders may also redeem points for merchandise via Citi's "ThankYou Redemptions Network." Both cards carry Citi's standard prime +9.99% pricing.

2. AMERICAN EXPRESS/COSTO TRUEEARNINGS CARD

American Express and Costco have rolled-out a new set of co-branded credit cards that offer bonus rewards for eating out and traveling. The new "TrueEarnings Card" and the "TrueEarnings Business Card" features a unique rewards structure, earning 3% cashback for eating out; 2% cashback for traveling; and, 1% cashback on all other purchases. Cardholders receive an annual rebate as a coupon that can be redeemed for cash or used for purchases at Costco warehouses. Both cards carry no annual fee and offer a 0% intro rate for the first 90 days on purchases. The on-going APR is prime +8.99%.

3. GAP CARD

Gap Inc. and GECF have launched a new private-label credit card that can be used across three of Gap's branded stores. The new Gap store card will be good for purchases at Gap, Banana Republic, and Old Navy stores and provide combined rewards. It is the first aggregate reward credit card program within the specialty retail apparel industry. Gap says a recent survey showed that 65% of Gap brand cardholders already shop at Banana Republic and Old Navy and that 75% of Banana Republic cardholders shop at Gap and Old Navy. Existing and new credit card customers will receive coupons good for 10% off an initial purchase with their card at each brand. Both existing and new customers will earn one point for every dollar spent with their card at any Gap, Banana Republic, or Old Navy store, including outlet and factory stores and brand Web sites. Cardholders earn a $10 coupon redeemable at any brand for every 200 points they accumulate across the brands.

4. AMERICAN EXPRESS IN:NYC CARD

American Express has introduced an affinity card for New Yorkers. The new "IN:NYC Card" offers "INSIDE Rewards" points redeemable for certificates at more than 70 New York City establishments or for one-of-a-kind experiential rewards. Cardholders earn one point for every dollar spent and double points on dining, movies, mobile phone service, cable and satellite TV service, Internet service, gym membership, and magazine/newspaper subscriptions. "IN:NYC" cardholders can also share or transfer "INSIDE Rewards" points with friends and family. Another "IN:NYC" benefit provides cardholders with VIP access to concert venues.

5. CHARLES SCHWAB/MBNA VISA

Charles Schwab Bank and MBNA have teamed to offer a new VISA credit card that will have the ability to redeem points for equity trades, starting in mid-November. The new "Charles Schwab Bank VISA" will offer MBNA's "WorldPoints Rewards" program, rewarding cardholders with the typical one point for each dollar charged. Charles Schwab says it plans to provide more points when the new card is used for qualifying Schwab brokerage charges, such as portfolio consultations. The "WorldPoints" program offers about 100 redemption options, including air travel rewards, companion airline tickets, 1% cash rewards, gift cards, merchandise from a wide range of retailers, and the concierge service featuring VIP event ticket access, and dining and entertainment reservations. The card carries no annual fee and a prime +1.74% interest rate for purchases, cash advances, and balance transfers.

6. BANK ONE THE ONE VISA

Bank One has introduced a checking account with a debit card for high school students. The new "High School Checking" account is designed for students age 15 to 18 and requires the student's parent or legal guardian to sign on as a co-owner of the account. The teen account is available at all Bank One locations nationwide. "THE ONE Card," Bank One's VISA check card, is also included featuring daily POS limits and restrictions on certain merchant categories. There is no monthly service fee as long as the parent or legal guardian maintains an eligible Bank One checking account and until the student turns 19. Bank One also offers a similar account for college students.

7. CHASE/CIRCUIT CITY REWARDS VISA

Chase has introduced the "Circuit City Rewards VISA" card after acquiring the co-branded program from Circuit City in May. The new card program offers five reward points on all Circuit City purchases and a one reward point on all other purchases. Rewards are redeemable for store certificates starting at $5 in exchange for 500 points. Customers who do not qualify for a "Circuit City Rewards VISA" card may qualify for a Circuit City private-label card, which offers the same rewards program. Chase says Circuit City stores will continue to accept existing Circuit City cards and "Circuit City Plus VISA" cards. However, eligible consumers can choose to upgrade their existing Circuit City cards to the new card.

8. MENS WEARHOUSE PERFECT FIT CARD

The Men's Wearhouse has relaunched its private label card under the "Perfect Fit Program" name after recently renewing its card program with GE Consumer Finance. Under the new "Perfect Fit" card program, users automatically receive a 5% discount on purchases charged to the card, in addition to continuing to earn one reward point for every dollar spent, and a $50 reward certificate for every 500 points earned. The former program did not provide purchase discounts.

9. WELLS FARGO/PELLA VISA

Wells Fargo Financial Retail Services has teamed with window manufacturer, Pella Corporation, to launch a dual-line VISA credit card for Pella's distributors in the USA and Canada. Under the program, cardholders have one credit line dedicated for purchases at participating Pella locations, while the other line is dedicated for VISA card purchases and cash advance transactions. Pella customers receive one billing statement with an itemized list of charges under each credit limit, while only being required to make one payment. The additional credit line enables Pella distributors to offer special terms such as "no interest" and "no payment" promotions.

10. U.S. BANK ATA VISA

The nation's 10th largest passenger airline is taking off with a co-branded bank credit card. Discount carrier ATA Airlines has linked up with U.S. Bank to launch the "ATA Platinum VISA" card and the "ATA Business VISA" card. Cardholders earn one point for every $3 in purchases without any cap. ATA offers a free roundtrip ticket for 6,000 points or a free companion ticket for 3,000 points. Cardholders are awarded 3,300 points with their first purchase. The "ATA Platinum VISA" carries a $55 annual fee and the "ATA Business VISA" carries a $75 annual fee. The interest rate for both cards is prime +9.99%, adjusted monthly. ATA operates scheduled service from Chicago-Midway, Hawaii, Indianapolis, New York, and San Francisco to over 40 destinations.

11. RBS/KROGER 1-2-3 REWARDS MASTERCARD

A co-branded bank credit card with The Kroger Co. has been re-launched for the second time. Royal Bank of Scotland Group has become the new issuer of the card, following U.S. Bancorp which took over in 1999, and Fifth Third Bank which first launched the card in 1993. The new "1-2-3 REWARDS MasterCard" offers two reward points for every $1 spent in participating Kroger-owned stores and supermarket fuel centers, and three extra points per $1 spent on our own family of quality brands, including "Private Selection" and Kroger brand products. Cardholders also earn one reward point for every $1 spent elsewhere. Every 1,000 points earns a $10 reward to spend in Kroger stores. The rewards will be mailed to customers quarterly. The new MasterCard also doubles as a "Kroger Plus" shoppers' card.

12. MBNA/STARWOODS PREFERRED GUEST MASTERCARD

MBNA Canada and Starwood Hotels have teamed to launch a co-branded MasterCard. The new "MBNA/Starwood Preferred Guest MasterCard" is the first hotel affinity card offered in Canada. In the USA, American Express holds the Starwood co-branding relationship and has also inked a deal for MBNA to issue AmEx cards next year in the USA. Under the "MBNA/Starwood Preferred Guest MasterCard" program, cardholders earn one "Starpoint" for every C$2.00 spent. A welcome bonus of 5,000 "Starpoints" will be awarded on the first retail usage of the card. Customers will earn an additional 5,000 bonus "Starpoints" for every C$10,000 in retail spend, up to 15,000 bonus "Starpoints" each year. Additionally, customers will earn another 5,000 bonus "Starpoints" the first time they charge a stay at one of the Starwood properties to their new credit card.

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